Judgment

HEGDE, J.:- These are appeals by special leave. They related to penalty proceeding. The assessee, M/s. Dyer Meakin Breweries Ltd. is carrying on business of manufacture and sale of wines, beer and fruit juices, etc. at Ghaziabad. The assessee was registered as a dealer under the Central Sales Act, 1956 (hereinafter referred as "the Act") at Ghaziabad. During the assessment years 1958-59 and 1959-60, the assessee submitted its sales tax returns to the Sales Tax Officer at Ghaziabad and it was assessed by that Officer Subsequently, the Sales Tax Officer, Ghaziabad, came to know that the assessee had misused some of the C forms issued to it. According to his information, the assessee, by misusing the C form, had purchased goods worth Rs. 11,754.62 in the assessment year 1958-59 and goods worth Rupees 2,68,242-38 in the assessment year 1959-60. Hence the Sales Tax Officer, Ghaziabad issued to the assessee a notice on January 8, 1960, calling upon it to show cause why he should not impose penalty on it under S. 10-A of the Act. The assessee did not give any explanation. Sometime thereafter, the assessee made an application praying for condonation of its default, alleging that the defaults were committed due to ignorance of law. The Sales Tax Officer did not accept that explanation. The Sales Tax Officer, Ghaziabad, again issued a notice to the assessee on October 31, 1960, requiring it to show cause why it should not be prosecuted under Section 10 (b) of the Act. Thereupon, the assessee submitted an application offering to compound the offence for a sum of Rs. 7,000. That offer was not accepted. Subsequently, on January 23, 1961, the Sales Tax Officer again called upon the assessee to show cause why penalty should not be imposed on it under Section 10-A. After examining the representation made by the assessee, the Sales Tax Officer imposed on the assesses a penalty of Rs. 1,000 in respect of the unlawful purchases made by it during the assessment year 1958-59, and a sum of Rs. 23,000 in respect of the unlawful purchases made by it during the assessment year 1959-60. On appeal, the Assistant Commissioner (Judicial) reduced the penalty in respect of the assessment year 1958-59 to Rs. 750 and in respect of the assessment year l959-60 to Rupees 17,000. Thereafter, the assessee took up the matter in revision. The revisional authority dismissed the assessee s appeal in respect of the assessment year 1958-59, but reduced the penalty from Rs. 17,000 to Rs. 15,000 in respect of the assessment year 1959-60. Thereafter, at the instance of the assessee, the revisional authority submitted the following questions to the High Court under Section 11 (1) of the U. P. Sales Tax Act.

"(1) Whether on the facts and circumstances of the case, the Sales Tax Officer, Ghaziabad, being not seized of the matter at the time of making the penalty order, the jurisdiction having been transferred to Lucknow Circle, was right and just in law in initiating the penalty proceedings and imposing the fine?

(2) Whether on the facts and circumstances of the case, the Additional Revising Authority, Sales Tax, Meerut Range, was justified in holding that the applicants made the representations with a guilty mind fraudulently and falsely, with the full knowledge that the objected goods purchased were not covered by the registration certificate?

(3) If the answer to question No. (2) is in the negative, whether the imposition of penalty under S. 10 (b) of the Central Sales Tax Act was justified and right in law?"

The High Court answered the first question in favour of the assessee. It came to the conclusion that the Sales Tax Officer, Ghaziabad, had no jurisdiction to initiate penalty proceedings against assessee, as by the time he made his order, the jurisdiction over the assessee had been transferred to the Sales Tax Officer, Lucknow. Having answered the first question in favour of the assessee, the High Court thought it unnecessary to answer the remaining two questi